Marketers always need good pricing strategies to maximize profits. Factors such as production, price distribution, competitor services, strategic location and target customer base of a business need to be considered by the business owner to a large extent. While customers won’t buy overpriced goods, your company won’t be able to succeed if its pricing is too low because then it won’t be able to pay the company’s costs. Here are a few different strategies that nearly every business implements in their Trade Marketing plan.
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How important is pricing strategy
How important is pricing strategy?
In the development stage of an enterprise, the enterprise with a better pricing strategy can more easily maximize profits in the process of selling products and services. In setting prices, businesses should also consider each of the small factors of production range and price distribution, also consider competitors, their services and strategic location or target base. targeted businesses. Customers do not want to buy products that are too expensive for the quality, but also no one wants to buy products at too low a price, and if the product is low, the business cannot afford to pay the cost. Here are some strategies businesses can refer to in the process of trade marketing.
Pricing Strategy Premium Pricing
2. Pricing for Market Penetration
A market penetration strategy will often attract buyers by offering goods and services at a lower price than the market level. While many new companies use this approach to get customers’ attention, market entry prices tend to result in a loss of the business’s starting capital. Gradually, the business’s reputation in the marketplace The market can be profitable and make the brand stand out in the industry. Often after a long period of time, after having penetrated the market to a certain extent, companies often begin to raise prices to better reflect their position in the market and yield interest.
3. Economy Pricing
This pricing method is widely used from food businesses to retail distributors. With this strategy, businesses minimize all costs related to Marketing and production to target customers who are “low-priced”. As a result, these customers will buy the item they need without scrutinizing it.
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While thrifty pricing strategy is extremely effective for large companies like Wal-Mart or Target. Small businesses can face many difficulties if they apply this strategy because their revenue is very limited, making it impossible to set prices too low. However, if a small business can offer discounts to loyal customers, it can be a great strategy.
4. Price Skimming
Skimming is a way businesses can maximize sales for goods and services. At the beginning, businesses often set prices high and then lower prices compared to competitors’ goods in the market. One of the benefits of a price adjustment strategy, a skimming price strategy is that it allows a business to maximize initial profits with customers who readily accept the price and then gradually reduce the price to attract customers. “cheap” customers. This strategy not only helps businesses cover some of the initial product development costs, but also creates an illusion of quality and exclusivity when the product is first introduced in the market.
Price Skimming Strategy
5. Psychology Pricing – Pricing according to customer psychology
The psychological pricing strategy of customers is considered a form of “magic”, Marketers use this strategy to hit the emotional side of customers rather than logic. For example, setting the price of 1 the $199 wristwatch proves to be more appealing to consumers than the $200 price setting, even though the real difference here is minimal. The explanation for this is quite simple, because most of the psychology of customers will rely on the first numbers of the price to come to a buying decision. The goal of follow pricing is to increase demand by creating an illusion of added value for the consumer.
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6. Bundle Pricing – Bundle Pricing
With a bundle pricing strategy, businesses will offer a lower price for a product when customers buy more than one product at a time. Bundle pricing will not only help businesses clear their inventory, but will also give customers a feeling that they’re getting a lot because the business is giving them great value. Bundle pricing will be extremely effective. results for companies that have goods to go attached. For example, products such as milk for children, if purchased by the bag or by the box, will enjoy preferential prices and other added values such as toys, or water bottles… But accordingly, businesses also need to Pay attention to how much you are paying for this strategy and compared to the revenue you are making a profit or loss.